Moderna headquarters, exterior view, Cambridge, Massachusetts, USA.
Plexi Images | GHI | UCG | Universal Images Group | Getty Images
Moderna on Thursday said it plans to cut around $1.1 billion in expenses by 2027 and win approvals for several new products as it charts a path forward after the rapid decline of its Covid business.
The biotech company said it expects 10 new product approvals through 2027. But Moderna said it will also pause work on some products in its pipeline and scrap others, as it aims to “pace ourselves” in new research and development spending.
The company aims to trim R&D spending to a range of $3.6 billion to $3.8 billion in 2027, down from an expected $4.8 billion at the end of this year, according to a release.
“You’re going to start seeing things come down because there are some studies that we are going to basically sunset and we’re not going to start,” Moderna CEO Stephane Bancel told CNBC, adding that the company is putting its latent product portfolio “on hold.” That refers to a category of viruses that linger inside patients for prolonged periods without causing any symptoms but can reactivate and cause serious health complications later in their lives.
Still, shares of Moderna fell more than 15% on Thursday.
Leerink Partners analyst Mani Foroohar said in an email Thursday that the company’s updates “put to rest key elements of the bull thesis” for its stock and “reflect a worsening financial position.”
“R&D reductions are too far out chronologically to be credible from a management team that we think has proven serially unable to project the performance of their business,” Foroohar said.
In a research note Thursday, Jefferies analyst Michael Yee said that the bulk of the cost savings won’t be achieved until 2027, which “now delays profitability until 2028.”
Moderna said it plans to “break even” on an operating cash cost basis with $6 billion in revenue in 2028. The company previously said it expects to break even and return to growth in 2026.
The company expects 2025 revenue to come in at $2.5 billion to $3.5 billion. From 2026 to 2028, Moderna expects a compounded annual growth rate of more than 25% as new products launch.
While Moderna expects some product approvals in 2025, the company is “not expecting meaningful revenue contributions until the year after,” Moderna CFO Jamey Mock told investors during the event.
Also on Thursday, Moderna announced positive late-stage trial results for its vaccine against respiratory syncytial virus in high-risk adults ages 18 to 59, with plans to file for approval for that age group this year. It also announced positive data on its experimental stand-alone flu shot for adults ages 65 and older.
The company unveiled those updates during its annual research and development day investor event in New York on Thursday, which focuses on its product pipeline and long-term business updates. It comes around four months after U.S. regulators cleared Moderna’s RSV vaccine for seniors, its second commercially available product after its Covid vaccine.
The company said it now has five respiratory shots with positive phase three results and expects to submit three of those jabs for approval this year. That includes Moderna’s combination shot targeting Covid and the flu, which it expects to file for approval in the U.S. this year, along with a new and more effective version of its Covid shot.
Moderna also has five nonrespiratory products across cancer, latent viruses and rare diseases that could be approved by 2027, according to the company’s release.
The company expects 2025 revenue to come in at $2.5 billion to $3.5 billion. From 2026 to 2028, Moderna expects a compounded annual growth rate of more than 25% as new products launch.
“That’s really a remarkable achievement that the team has accomplished, leaving us with a lot of drugs that are working, which is why we need to pace ourselves in terms of R&D investment,” he told CNBC.
What’s in Moderna’s pipeline?
Moderna presented new data on its RSV vaccine, mRESVIA, which is cleared in the U.S. and European Union for adults 60 and above.
The company said the shot met all of the main efficacy goals in an ongoing phase three study on adults ages 18 to 59 who are at increased risk of getting severely sick from the virus. There were no safety concerns observed, Moderna added.
There are currently no RSV shots approved worldwide for younger, high-risk adults, such as those with weakened immune systems or underlying chronic conditions like asthma and diabetes. Moderna’s main rivals in the RSV space, Pfizer and GSK, are also seeking an expanded approval for the age group.
Moderna CEO Stephane Bancel speaks at the grand opening of the company’s new headquarters outside Kendall Square.
David L. Ryan | Boston Globe | Getty Images
Bancel said the company plans to use a “priority review voucher” when it files for approval for people ages 18 to 59, which would reduce the amount of time it takes for the Food and Drug Administration to review the product to six months instead of 10 months. Moderna hopes the agency will clear mRESVIA for that age group in time for the RSV season in 2025.
“It’s in the millions of people who could benefit. … We are also doing so just to be competitive in the marketplace because if you are a large retail pharmacy, you want your product to be available for all of your customers that show up,” Bancel said.
But the company is also discontinuing development of its RSV vaccine for infants under 2 years old based on “emerging clinical data.”
Moderna said its experimental stand-alone flu vaccine, mRNA-1010, produced a higher immune response against the virus compared with an existing flu shot in a recent phase three trial. The shot has also demonstrated “consistently acceptable safety and tolerability” across three late-stage trials, the company added.
Meanwhile, Moderna said it plans to move its shot against norovirus, a highly contagious stomach bug that causes vomiting and diarrhea, to a phase three trial “imminently.” Bancel said he believes the company could finish the study within a year and file for approval immediately after if the data is positive.
“This could be a product that is two years away from launch, which is great because there’s nothing today to treat norovirus,” he said. “A lot of health-care professionals get infected by their patients.”
Moderna is also partnering with Merck to develop a personalized cancer vaccine, which is being studied in combination with Keytruda in patients with different forms of the disease.
The companies are studying the shot in a phase three trial in patients with a deadly skin cancer and discussing an approval with regulators based on data from a mid-stage study on the jab.
But Moderna said the FDA has “not been supportive” of a so-called accelerated approval of the shot based on its existing data. That refers to an FDA designation that clears drugs faster if they fill an unmet medical need for serious conditions.
Bancel said, “we’re going to keep having discussions” with regulators, and “we’re also generating more data.”
— CNBC’s Angelica Peebles contributed to this report.
